"Unmortgageable property" - options

Melkelvardil

Hi all,

We've fallen in love with a property - it needs work doing to it, including replacing windows which have been vandalised, and sorting out some mould issues caused by a burst pipe in the property. The property is otherwise not in a terrible condition.

Our mortgage broker has advised that he thinks the property is unmortgageable due to it not being habitable. We would be relying on a mortgage to buy the property, but would then be using our own funds for renovations.

I can't post the link, but the property is easily findable on RightMove: search for IP21 4RD, it's £300,000.

Does anyone have any experience of something similar, and if so are there any solutions or work-arounds? Our mortgage broker mentioned a bridging loan but seemed hesitant about this option.

Thanks!

jimbog

this one?
https://www.rightmove.co.uk/properties/155232074#/?channel=RES_BUY

Melkelvardil

jimbog said:

this one?

Yep that's the one.

horsewithnoname

Is it uninhabitable though? If the window was secured would it be ok then? Obviously the mould is an issue but - and I’m no expert - is that enough to make it uninhabitable. 

I can see why you want it, it’s lovely ☺️ 

mark_cycling00

If you haven't already, I'd also try to get some quotes for buildings insurance for this grade 2 thatched cottage.

It's not uncommon for the rebuild value to be 2 or 3 times the market price due to both these factors.
A lot of chat on restoration forums about this recently.

FlorayG

mark_cycling00 said:

If you haven't already, I'd also try to get some quotes for buildings insurance for this grade 2 thatched cottage.

It's not uncommon for the rebuild value to be 2 or 3 times the market price due to both these factors.
A lot of chat on restoration forums about this recently.

For sure - I own a tiny cottage market value £180k and the insurance for rebuild quotes £700k!
Nobody builds in stone these days

FlorayG

jimbog said:

this one?
https://www.rightmove.co.uk/properties/155232074#/?channel=RES_BUY

OMG I'd buy that! Gorgeous place, imagine the possibilities - but OP check the condition of the thatch carefully because replacing that will be a HUGE expense

newsgroupmonkey_

Lovely though it is, Grade 2 would make this an absolute money pit.

caprikid1

Hope you have a spare £200K .

saajan_12

Ultimately for an unmortgageable property, the options are 
1) Fix the problems to make it habitable before completion -> risky. You'd have to either agree to pay for repairs to a property you don't own yet or convince the seller to do them and increase the purchase price accordingly. 

2) Don't require a mortgage - eg borrow money on a bridging loan to buy the property, do the repairs, then get a mortgage to replace the bridging loan. Expensive as the bridging loan is usually ~10x the interest rate on a normal mortgage, but the idea is it would only be for a short time. Also risky if you subsequently can't pass raise the mortgage. 

No great options, but depends on what the issues are that make it unmortgageable.. 

Albermarle

Our mortgage broker has advised that he thinks the property is unmortgageable due to it not being habitable.

Why does he think it is not habitable? It looks like it is.

I can imagine many lenders shying away from it due to the grade 2/thatched roof etc. especially if you did not have a big deposit, but it certainly does not look unhabitable.